Are Batteries Ready for Prime Time?

August 5, 2015

There has been a lot of hype surrounding batteries recently. The novelty of being disconnected from the electric grid and controlling one’s source of power is very attractive.  Tesla’s recent release of a new family of batteries has only added to the excitement surrounding batteries.

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So, are batteries ready for prime time, or are they still 5-10 years from widespread acceptance?
Cost vs. Benefits
One of the major challenges with batteries is the cost vs. benefit provided.  Historically, batteries have been time-consuming to engineer, costly to install, and difficult to maintain.  This results in a high life-cycle cost of electricity storage that is typically difficult or impossible to justify.
Do batteries make sense with Solar?
Much of the hype surrounding batteries is the thought that they make more economic sense when combined with solar.  The problem with this theory is that most solar installations have a much cheaper “battery” that is currently available, called net metering.  While net metering is not an actual physical battery, net metering allows solar customers to spin their meter backwards when they are producing more energy than they are consuming (pushing that electricity back to the grid), and use that power at a later time at no additional cost (i.e. overnight when the solar panels are not producing).
In what situations do batteries make the most sense?
1. Specific subsidies for storage:  Some locations in California currently incentivize battery back-up systems to allow more solar to be connected to the grid.
2. Back-up power:  In locations where the grid is unreliable, having a source of backup power may be crucial.  Typically, a generator will provide the cheapest source of backup power by far.  It would require multiple costly batteries to keep a few loads running in a typical house.  For example, the new Tesla 10 kWh battery (at 2 kW continuous power) couldn’t even run two 1500 watt space heaters simultaneously, and it could only run one 1500 watt space heater for less than 7 hours, even if it would discharge the battery 100%.
3. Off-grid applications:  Batteries can make sense for small houses and cabins in remote locations that are inaccessible to the grid.  In some cases, it may be less costly to install an off-grid system (typically coupled with a generator) than to connect to the grid.
4. Grid services:  In some areas in the United States, batteries are used by utilities to help regulate the grid frequency.  It is conceivable that batteries could also be used at some point in the future to regulate voltages, and for other similar grid services.  The batteries supply these services in exchange for a payment from the utility or grid operator, which would help to pay for the cost of the battery.  This use for batteries is available in some areas, but is likely several years from widespread acceptance.
As you can see, most of the benefits of batteries are several years away from making a large difference in the world of energy.  At the same time, batteries will be an important part of the energy mix at some point in the future.

Tim Beiler

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